TWN Info Service
on WTO and Trade Issues (Feb10/16)
Geneva, 19 Feb (Kanaga Raja) -- Three major sugar producers and exporters - Australia, Brazil and Thailand - have again voiced their serious concerns over the recent decision of the European Union to authorize the export of an additional 500,000 tonnes of out-of-quota sugar.
These concerns were voiced at a meeting of the WTO Dispute Settlement Body (DSB) on Thursday.
On 28 January, the EU announced a decision to increase its out-of-quota sugar exports by half a million tonnes. It argued that this "temporary measure", which it claimed fully respects the EU's international obligations, was made possible by the "exceptional market conditions" at both the EU and world level.
In a press release and subsequent press conference on 1 February, the three countries had expressed concern that the increase in out-of-quota exports by 500,000 tonnes means that the total out-of-quota sugar exports by the EU may reach 1,850,000 tonnes in marketing year 2009/2010.
This amount would be 576,500 tonnes over the 1,273,500 tonne ceiling that is the EU's commitment under the WTO Agreement on Agriculture, they complained.(See SUNS #6855 dated 3 February 2010.)
In its statement at
the DSB Thursday,
In that context,
According to the Australian statement, the EU is now forecasting that it will export almost 2 million tonnes of out-of-quota sugar in 2009/10.
But, pointed out
Australia noted that in Commission Regulation 94/2010, which announced the additional exports, the Commission argued that "exceptionally favourable weather conditions in 2009" have resulted in 500,000 tonnes of out-of-quota sugar being available for export.
Yet the EU plans to
have no out-of-quota sugar stocks at all at the end of 2009/10, said
It said that the Australian sugar industry has conveyed to the Australian government its concerns about the EU's increased exports, and the signal this will send to European producers.
It said that international markets have quickly computed the impact of the additional sugar exports, and the sugar prices' previous upward trend was reversed in late January, after the Commission recommended the EU's Management Committee to authorize the exports.
Highlighting the mid- to long-term implications of the EU's decision on Brazilian producers, it further said that European sugar producers will be stimulated to produce more surplus sugar in the following marketing years.
The mere assertion that sugar beet costs of production are circumstantially below out-of-quota sugar beet prices - or that sugar costs of production are likewise below international prices - falls far short of the EU's burden of establishing that its sugar regime now operates in such a fashion that European sugar exports do not enjoy artificial competitive advantages, it added.
In its statement,
Statements in the Regulation referencing "current economic conditions", the "most recent ... exceptionally favourable weather conditions" and "exceptionally high world market prices ... at this time" are not persuasive in light of Commission figures showing sugar over-stock of several hundred thousand tons per year from marketing year 2006/7 onwards, said Thailand.
Thailand expressed worry that Regulation 94/2010 signals to EU sugar producers that excess out-of-quota sugar can be exported, which could possibly lead to a continuous cycle of over-production and artificially depressed global prices.
It added that depressed sugar prices detrimentally affect the livelihood of 1.5 million farmers' and sugar workers' households, most of whom live in some of Thailand's lowest income areas.
The EU stressed that its decision to export 0.5 million tonnes of sugar is a temporary measure, adopted in view of the exceptional market conditions at both the EU and world level.
It said that world prices are at a record high level and there is a shortage of sugar which is affecting importing developing countries. It added that it does not expect these market conditions to last beyond the season 2009-2010.
The EU again claimed that the decision fully respects its international obligations - the quantities on sale are not subsidized. It said that the world sugar prices are at the moment higher than EU production costs and EU producers have become much more competitive following the drastic overhaul of the EU Common Market Organization for sugar.
To dispel the doubts of other WTO Members, the EU said that it is ready to provide any necessary technical information underpinning the EU's temporary decision to export sugar.
The DSB took note of the statements, according to trade officials.
In other actions, the
DSB adopted the report of the panel in a dispute concerning US anti-dumping
measures on polyethylene retail carrier bags from
The DSB, in January,
handed down a ruling holding that the
The DSB also sent to
arbitration an EU Article 22.2 request for authorization to suspend
the application to the